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Creating Organizational Value in Your Supply Chain: Cost Centered or Growth-Driven?

From mpo-mag.com

“I am fed up seeing all the metrics from my head of Supply Chain on efficiency. I want to hear about what we’re doing to get new customers [and] get to market faster. I don’t want to hear about efficiency. I want to hear about growth.”—Fortune 500 company CEO, from DHL’s November 2016 whitepaper, “The Plug and Play Supply Chain: Beyond Efficiency to Growth.” In working with supply chain professionals worldwide, I am often interested in learning how they create value in their organizations through the supply chain. Experienced professionals are aware that there are many avenues to success through supply chain processes. The key, however, lies in the delivery of the value proposition. Does the supply chain bring value by focusing solely on cost, or does it create value through revenue growth? Moreover, does the supply chain consider ways to create success for all stakeholders—employees, management, shareholders, and customers alike? A supply chain with a revenue growth-centered focus understands its role in helping to grow the company. Indeed, the supply chain is integral to the strategic development of any well-run organization. The supply chain is a key corporate stakeholder that can help the business expand its customer base, which, in turn, increases revenue. As stakeholders, supply chains must decide whether they can add value to their organizations by prioritizing activities that lead to sustainable growth. Despite its role in corporate revenue growth, cost is still important to the sourcing team. In fact, creating true cost competitiveness is a growth driver in every organization.

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